On 16 December 2015, the General Court of the European Union overturned the European Commission’s 9 November 2010 Airfreight decision (Case C.39258) and, in doing so, annulled one of the largest fines imposed in EU history.
If the General Court’s decision is not appealed by the Commission, or if the appeal is not overturned, it will have considerable cost implications for claimants that have launched follow-on damages actions before the English courts and elsewhere. These cases would have relied upon the finding of the alleged loss and damage caused by the cartel behaviour. These cases have been running for a considerable time.
After carrying out formal investigations into the conduct of twenty air cargo carriers back in December 2007, the Commission imposed a combined fine of €799,445,000.00 on eleven airlines in November 2010 pursuant to Article 23(2) of Regulation (EC) No 1/2003. The Commission found that the parties had, over a six year period, operated a global cartel in breach of Article 101 of the Treaty on the Functioning of the European Union (“TFEU”) by coordinating “their pricing behaviour in the provision of airfreight services with respect to various surcharges and the payment of commission payable on surcharges”.
However, ten of the eleven fined parties appealed the Commission’s decision on the basis that it was internally inconsistent, and on 16 December 2015 the General Court agreed, overturning the Commission’s decision on procedural grounds, and cancelling the fines imposed thereunder. The General Court concluded that the Commission’s 2010 decision contained inconsistent descriptions of the conspiracy in the grounds for the decision and in the operative part of the decision. This not only caused confusion as to whether the airlines have committed four separate offences or one single and continuous infringement, but also contradicted the principle that parties and national courts should have a clear understanding of the scope of any and all alleged anti-competitive conduct.
The Commission now has a two-month opportunity to appeal the decision of the General Court to the European Court of Justice. If the General Court’s decision is confirmed in that appeal, or alternatively goes uncontested, then the airlines may escape liability for millions of euros in fines, despite the fact that the General Court accepts the Commission’s ruling that their coordination did indeed constitute an illegal price-fixing cartel.